Other BriefingsWorking Hours and Overtime Regulations in Vietnam: What Foreign Employers Must Know
Vietnam continues to attract foreign investment due to its competitive labor costs and growing pool of skilled workers. For businesses establishing operations in the country, one of the most critical aspects of local compliance is familiarity with Vietnam’s labor laws, especially those related to working hours and overtime. Missteps in this area can lead to fines, strained employee relations, and operational delays.
To stay ahead, foreign employers must understand how working hour restrictions, overtime entitlements, and enforcement practices apply in practice, and how to embed them into day-to-day workforce management.
Legal framework governing standard working hours
According to Article 105 of Vietnam’s Labor Code (Law No. 45/2019/QH14), the standard working schedule is limited to eight hours per day and 48 hours per week. This framework provides flexibility for employers to arrange different work patterns, such as rotating shifts or compressed weeks, depending on operational demands. Employers must also ensure employees are given appropriate rest, including a minimum 30-minute break during night shifts (Article 109) and at least one full day off each week (Article 111). These requirements are non-negotiable and apply equally to domestic and foreign-invested enterprises.
When overtime is permitted, and how it is limited
Vietnamese labor law permits overtime only under specific conditions, typically to address urgent workloads or seasonal demands. The government sets strict caps on overtime: the total working time, including overtime, must not exceed 12 hours in a day, 40 hours in a month, and 200 hours in a year.
In exceptional cases defined by the government, such as sectors involving export manufacturing, electricity supply, and telecommunications, this annual limit may be extended to 300 hours with appropriate approvals.
All overtime must be based on mutual agreement, and companies are obligated to maintain detailed records of hours worked. Without this documentation, businesses risk administrative penalties.
Rules for compensating extra hours and night shifts
Overtime compensation is outlined in the Labor Code. Work performed beyond normal hours must be paid at no less than 150 percent of the standard rate for weekday overtime, 200 percent for weekend work, and 300 percent for work performed on public holidays and paid leave days.
Night shifts (between 10:00 p.m. and 6:00 a.m.) must be compensated with an additional 30 percent premium. If night work overlaps with overtime, both rates apply cumulatively.
Payroll systems must reflect these calculations clearly and accurately. During labor inspections, authorities often request proof of compliance, including time sheets and payslips. Errors or omissions, especially underpayments, can lead to fines, back payments, and damaged employee relations.
Compliance obligations and areas of regulatory focus
Vietnamese labor authorities at both national and provincial levels have stepped up inspections in recent years, particularly targeting companies that exceed legal overtime limits or lack proper recordkeeping. Common violations include going beyond the 12-hour daily limit or the 200/300-hour annual cap, failing to pay overtime premiums, and maintaining incomplete documentation. Administrative fines for such violations range from VND 4 million (US$152) to VND 150 million (US$5,724), depending on the severity and nature of the breach.
Inspectors focus closely on whether overtime was approved by employees, whether premium rates are correctly calculated, and whether time sheets and payslips are audit-ready. To mitigate risk, foreign employers should ensure their HR and payroll systems can categorize hours based on work type, keep timestamped consent forms, and generate comprehensive reports suited to audit demands.
Building internal alignment with local labor standards
Overseas companies operating in Vietnam should localize their corporate policies to align with national labor norms. Establishing fair and transparent rules around working hours, accurately compensating employees, and ensuring all timekeeping records and pay slips are accurate and audit-ready are essential to long-term business success.
These practices not only help companies avoid legal risk but also promote employee satisfaction, reduce turnover, and enhance productivity.
In cases where employees resign or are terminated, employers should also understand their obligations regarding severance pay. Read our guide on Severance Payments in Vietnam for full details.
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